In an exclusive conversation with ifa earlier this month, Minister for Financial Services Stephen Jones said draft legislation on the first stream of the government’s response to the Quality of Advice Review (QAR) should be made public by the end of October.
“I hope to have some draft legislation within the month so that we can pour over that, just to make sure it’s technically correct, and get it into Parliament first up next year,” Mr Jones told ifa.
He explained that the government has stress tested “a bunch” of the recommendations made under stream one – recommendations he has referred to as “red tape reduction” focused.
The second tranche, which centres on retirement income, is the “next cab off the rank”, the minister disclosed to ifa.
“We’re doing all of these things in parallel, but it’s as simple as this. You got a tube about that fat, and if you try to squeeze everything through it at once, nothing will pass through. So that’s the tube of Parliament and the policymaking process. So I’ve been very pragmatic,” Mr Jones said.
“What can we get through? What’s ready to go? What’s not ready to go? And let’s try and move these things through in a logical fashion.”
Under the first stream of the QAR recommendations, advisers can expect the following changes:
- The removal of the “Safe Harbour” steps, originally designed to protect financial advisers, from the Best Interests Duty.
- The streamlining of the ongoing fee renewal and consent requirements into a single form, and the removal of the requirement to provide a fee disclosure statement.
- The replacement of statements of advice with an advice record that is more fit for purpose.
- More flexibility in how financial service guide requirements can be met.
- The introduction of standardised consumer consent requirements to classify a consumer as a wholesale or sophisticated client.
- The simplification and removal of certain exemptions to the ban on conflicted remuneration.
- The introduction of standardised consumer consent requirements for life, general, and consumer credit insurance commissions.
To hear more from Mr Jones, click here.
Nothing will happen for at least 2 years and them I’m out of this industry. Cannot wait !!!!!!!!
waiting, still waiting .. although what he says makes sense and he is mile long better than any of his predecessors, not to mention the old nimwits from the FPA who were useless
Jane Hume said a lot of stuff that made sense when she first started as minister. But then she trotted out all sorts of excuses and delays, and ended up making things worse.
Unfortunately Jones seems like he is doing exactly the same.
Ok, I’ve got the stopwatch, let’s see…
“the government has stress tested htem…”
Code for we have talked to the Industry funds just to make sure they can more easily recommend their members roll over super from other funds to them…
That seems to be the way it is working in our current first world democracy – unfortunately.
Are these the same quick wins that minister Jones promised would be addressed in the first half of 2023? Can we really trust that they will deliver anything of substance to improve the delivery of advice
The streamlining of the ongoing fee renewal and consent requirements into a single form, and the removal of the requirement to provide a fee disclosure statement is basic, as adviser fees have always been reported in the Annual Fund statements for the past decade. The key change required is to change the Fee Consent Form to be a one-off form (until the fee amount changes), as exists in every other jurisdiction on the planet. Until then, over 1 million Australians orphaned on the fund platforms will be unable to access cost effective retail advice.
Can someone explain how removing the SOA and changing it to a “fit-for-purpose” document is a “quick-win”. The complexity here is enormous. The reason the SOA is how it is now is because the licensees have to attempt to interpret the many conflicting pieces of legislation, the code of ethics, the best interest duty (which will still remain) etc. Then we all as an industry have to agree. Then we will have all sorts of consumer groups trying to explain that 60-100 page documents are good for consumers. I just can’t see this being a quick change. Either that or the requirement will be to hold an SOA on file if the consumer requests it in the future. In which case absolutely no benefits will have been achieved from the legislation. In fact we will then have to produce a presentation document that is “fit for purpose” AND and SOA for the file. I am not jumping for joy around this one…
I understand your point, it will also test this new Bill which should somehow override those conflicting legislations and codes…..and not to mention what form those consents will be in – my guess is that we make clients sign a lawyer-worded document. We can only live in hope #makefinancialadvicegreatagain
Wait for all the compliance experts to start throwing their hat in the ring, and the “fit for purpose document ends up looking like a SOA by another name. I think it should be up to the advisers professional judgement on how they present their advice, where a lot of simple advice could be conveyed verbally to the client, and the client file holding supporting file notes and research to justify the advice.
So…. more talk no action. In the meantime $3m super tax legislated, ASIC Levy increase legislated, Advisers to pay for AFCA’s CSOLR legislated, and ASIC being funded $700m by adviser and litigation against advisers to “regulate” a profession which has lost 1/3 of practices since 2018. This is not a quick win, this is gaslighting and intentionally ruining IFAs to pander to industry funds who time and again rort members